Pricing Art and Creative Services

Charging for creative projects (PT 1)

Billing is the most challenging aspect of being a creative person trying to make a living, why?

First it needs to be broken down into pieces. There is the artist and the person paying for services. between these two places there can be a million variables and a million mis-communications that makes charging for a creative service frustrating and send so many things into a downward spiral of a hatred of income.

Granted my experience around this is relatively fresh and I have found myself floundering with billing issues due to inexperience. I have spent some time learning from my professors at SMCC and other artists and creative professionals. I thought it might be important to share what I have learned with other people who are charging clients for creative services or products rendered. (this will come in a series)

To price a painting

Lets start with perhaps the easiest one. The creation of a product or work of traditional art (which I also do). This is billing for a painting, sculpture, or crafted item which the artist has created, not digital art (that falls into another place IMHO for billing purposes)
An artist can stand back, look at his/her work and have a rough estimate of what the raw materials in a particular piece has cost. If not, keeping receipts will be important. For me, I know what each board costs, what tubes of paint and mediums cost and how many were expended, and how many, if any brushes I wrecked creating this piece of art. This is what I consider RAW cost. That is not paying the artist for talent, time, studio overhead.... just the raw materials in the piece - be honest....
I then put a value on my time. That time may be from priming and gesso up to finish varnishing. I also try to consider shortcuts I use. I often will prime a number of boards all at once, and varnish a number of finished pieces all at once to save on time, effort and space. So this prep and finish time is often minimal as I may do 5 to 10 at a time.
How many hours did you spend painting and creating? Not drinking coffee, talking to your friends, and shmoozing collectors, but actually working and focusing on the piece of art. If you keep a stop watch handy, it may really surprise you how little time you actually spend with brush and mind on the piece.
Here is the place a lot of artists need to honestly look at their worth. It is very difficult to do, to admit you are a $13 an hour artist. Sometimes a $10 or $8 an hour artist.
If you don't have galleries contacting you to hang your work, you are in this place. You need people to buy your work, to start collecting it, to talk to their friends about it while it's hanging on their walls at home. We all want to throw a $10,000 price tag on our artwork, but if no one is willing to pay that price, you will be left looking at it for the rest of your life. I can say a chicken is worth $1,000, but if no one pays $1,000 for the chicken... it's worth nothing at all.
There is the idea that if an artist doesn't value the work, how can anyone else? So pricing SHOULD start at $10,000!!!
This will only happen if you win the lottery and have a "superstar" artist telling everyone how wonderful and great and valuable your work is, doing all the publicity and making you famous without earning it. This can make you a short lived artist.
You have to work your way to the $10,000 price tag, you need to sell modestly to begin. You need to increase your time value (hourly rate) to get to $10,000. I tend to start valuing my time at the same rate my current employer does, and I like a little extra for my education.
A studio has overhead and other costs for sure, but most likely you don't need to recoop an entire months rent, heat, lights, utilities in one painting, or sale. Divide down a daily operating cost of having a studio (really). You may decide that either your art isn't ready to support a studio, or you need to spend more time in it working. The best studios are free, or close to it. but once you get to the daily cost, consider how many hours you spent making this piece of art.
So heres where we are:
RAW MATERIAL + HOURLY RATE + small OVERHEAD = painting price

Probably A LOT less than the fantasy number you plucked out of the air.
Now step up to the plate, Uncle Sam is involved and will steal 25% of everything at the end of the year, you are also making a retail sale (are you paying sales & use tax?).
If you make under a certain amount you end up not paying taxes at all and get the money back (bonus!). Artist fall under that "Self Employed, independent contractor I-9 category I believe. A place that can cost you dearly if you don't consider it now.

Bill of Sale

Not only does giving your buyers a bill of sale add to the authenticity of what they bought, but it adds confidence in their future purchases (My apologies to customers who didn't get one.... come back and I will give you one now that I have learned)
On the bill of sale you can add Sales tax.... but had better be paying it to the government not just pocketing the extra. IF not, don't add it, take a loss and consider it included.

So heres where we are:
RAW MATERIAL + HOURLY RATE + small OVERHEAD + 30% = painting price

Lets break it down.... I have piece I recently did on 2x4 foot board.
Raw material cost $25 + $56 (14 x 4 hours)+ $10 overhead + 30% =  $118.30

I started at $300 and will probably sell it at $120. Why? I wanted to see if my time value had risen. Seeing my buyer so pleased at $120 indicates to me, it hasn't yet. Keep making art at the current rate, keep collectors buying and supplies in the studio. As people become excited about my art, and the demand on my time heightens, I may need to adjust my time value again later. It takes a while to feel out what your customers are happy to pay. Don't squeeze them for what they are unhappy to pay.... it's what they are happy to pay. I do ask my customers to try to avoid discussions of price with their friends, although I know it comes up.
This is the way to find the value on your hourly time. Plug in the happy sales number on the end, and you can see where you landed for your hourly rate as an artist.
$14 to $15 an hour, not great.... but I could have been at work, not painting to get that. It is only one sale and $120 might only seem like a teeny drop in the bucket for the energy that goes into creating fine art.
It is, but if 50 people hang my work on their walls at home, and talk to their friends at dinner about it the value will grow.
If my work goes to a place of business where many people see it and consider it in a day, the value grows even more.
In the early days, you are selling your work to support your work, when it hangs, it is an advertisement for you.
Want to make more than $120 today? spend 8 hours in the studio, make 2 pieces, thats $240. When creating a product like fine art, the price can change and most likely people don't balk.  A painting you sell today for $120 might be worth $200 next month, and no one will blame you for it.... (if its selling)
It's when you get into billing creative services that things get tricky

to be continued....
(Coming up in PART 2)